1. Performance at work and its
appraisal: Demarcation of the field
1.1
INTRODUCTION
In this introductory chapter, we shall examine some key phrases and concepts that apply to the field of work performance, such as ‘performance’,
‘appraisal’, and ‘job evaluation’, among others. We shall briefly touch on
the factors that contribute to an employee’s performance at work and some
of the pitfalls involved in trying to reach objective appraisals of employees’
respective inputs to the productivity of their organizations.
1.2
WHAT DO WE MEAN BY PERFORMANCE?
It is probably axiomatic that the one goal that all businesses and corporations have in common is success. That means productivity – the ability
to deliver the goods or services to clients in the most optimal, efficient,
and economic manner. To do this, organizations need to define clearly
what those goods and services are and how best to run their operations
to achieve their goals. It is also axiomatic that, in order to proceed, the
companies need to employ the most qualified staff possible to perform the
necessary tasks that will ensure a smooth flow of production and delivery
of the commodities to those interested in receiving them.
However, once an organization has selected its employees, defined their
jobs and positions, trained the work teams, and set them to work, what
still needs to be done? Clearly, the next stage is an evaluation of the quality
of the employees’ performance. Of course, one might ask, why should we
bother with work performance at all? The answer is clear, however: because
work performance affects our real income, our national competitiveness,
and our quality of life. Evaluating work performance is not an unusual
step. The fact is that organizations are continually appraising their workers’ contributions to the organization, formally and informally, for the
purposes of hiring, firing, promotion, and rewards. That does not mean,
as we shall see, that there are not constant challenges to management in
organizations presented by the appraisal process. However, before we can
3
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Improving performance appraisal at work
move on to a discussion of performance appraisal (PA) per se, we need to
agree on what we mean by performance.
Campbell (1999) defined performance as a set of behaviors, the implementation of which is relevant to achieving the goals of a company or
organization. For Goler, Gale, and Grant (2016), performance is the
value of employees’ contributions to the organization over time. The
­organization’s effectiveness is, in fact, an outcome of the set of behaviors
such as those described by Campbell. Consider, for example, SunOpta
Inc., which is a leading global company specializing in the sourcing, processing, and packaging of natural, organic, and specialty food products.
These activities, as well as research into the development of new products
based on natural ingredients, are pursuits that fit SunOpta’s mission to
be the recognized global leader in natural and organic food products and,
collectively, they constitute a recognized set of employee behaviors. Of
course, these macro-tasks can be broken down into any number of subtasks until there is a complete description of all the tasks involved, from
the outset to the finished product. Employees may be involved in the whole
(manufacturing) process or in one very small aspect, around which their
performance (productivity) may be appraised.
Campbell (1999) suggests that performance is composed of eight different components or dimensions:
●●
●●
●●
●●
●●
●●
●●
●●
Expertise in performing the job’s unique tasks, defined as the ‘core
arena’ (e.g., the optimal performance by a captain of the sum of
activities required to fly a plane from point A to B).
Expertise in performing the job’s non-unique tasks, defined as the
‘peripheral area’ (e.g., delivering flight data, weather reports, or
creating a pleasant flight experience for passengers).
Expertise in job-related written and oral communication (for
instance, the ability to convincingly present the need to develop
new pension savings channels within the framework of an insurance
company).
Investment of effort in the job.
Self-discipline (e.g., meticulously following procedures, standards,
instructions, and timetables).
Help offered to co-workers to perform their jobs.
Leadership, defined by a person’s ability to set a direction, to formulate a vision, and to influence others to follow.
Management and administration. Management is the set of actions
and skills performed to achieve the goals that are derived from the
vision, such as planning, supervision, organization, control, coordination, and guidance. Administration requires management actions,
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Performance at work and its appraisal­5
but it focuses on procedural, technical, and bureaucratic aspects that
are required to achieve the organization’s goals, such as finances and
human resources.
In essence, these eight components can be broken down into two major
categories – namely, direct performance and indirect performance. Direct
performance refers to workers’ input such as the quality of their work
and the level to which they achieve their assignments. That, in itself, is
a reflection of job expertise, which is termed ‘declarative knowledge’. In
contradistinction, indirect performance refers to worker attributes such
as personality, achievement motivation, and credibility, which are collectively termed ‘contextual knowledge’. Borman and Motowidlo (1993)
suggest that in some ways contextual knowledge reflects the benefit that an
individual employee contributes to the achievement of the company goals.
In a somewhat similar classification, based on evaluation of client service
jobs, Bowen and Waldman (1999) distinguished between the ‘technical
quality’ of the provided service and the ‘functional quality’ (attitude) of
the service giver.
1.3 FACTORS THAT AFFECT WORK
PERFORMANCE
We live in a real world in which people act and react, and in which the
circumstances that prevail are sometimes in our hands and sometimes
not. The internal and external influences that impinge on employee
performance are various; there are those within their control and factors
that are beyond their control. We examine some of these briefly and argue
that a model of performance appraisal has to incorporate a method that
compensates for the factors that the worker cannot control.
1.3.1
Technology
The first of these items is technology. After Hesketh and Neal (1999), we
note that we cannot attribute workers’ output solely to their input (direct
or indirect) and personality attributes. We need, additionally, to take into
consideration the quality and level of the technology used on the job. We
would then deduct the contribution of technology from the final performance product to obtain a valid measure of personal performance. Thus:
Performance = ƒ (the technological level of the job; the worker’s
personal input)
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Improving performance appraisal at work
For example, consider the precision of a medical diagnosis. The diagnosis
is the result of (1) the doctor’s declarative knowledge (qualifications) such
as knowing symptoms of diseases; (2) the doctor’s contextual knowledge
(personal skills) such as gleaning crucial health-related information from
the patient; and (3) the technical efficiency of the instruments used, such
as 3D imaging instruments or genetic testing. These instruments enhance
the precision of the diagnosis apart from the physician’s knowledge or
professional skill.
1.3.2
Situational Influences
Notably, any number of situational and extraneous influences can affect
job performance – for instance, lack of availability of staff or equipment,
out-of-date instrumentation, fluctuations in the market that create undue
pressures, and so on. Consider, for example, that following the unexpected
departure of two workers in a specific department, there is suddenly a
severe shortage in the workforce. The third remaining worker is required
to provide the work of three workers, making a special effort to cover for
the shortage of labor. Despite the skill applied and efforts invested, the
worker’s performance level deteriorates due to excess pressure: assignments are not completed on time and the level of mistakes rises. In such a
case, when appraising the worker’s performance, and after deducting the
effect of situational factors not in the employee’s control, we obtain higher
performance values than were in fact observed.
1.3.3
Organizational Climate and Culture
After London and Mone (1999), we expand the array of factors determining job performance to incorporate organizational climate and culture.
For instance, modern organizations require employees to learn constantly
to maintain and improve their knowledge and skills, in view of frequent
changes to work processes, procedures, and technologies. The motivation
of the employee to undergo such training is critical because, beyond any
other considerations, workers’ enhanced knowledge and skills improve
performance levels and, ultimately, productivity. Therefore, when assessing
performance, we need to apply an increment that measures motivation level.
Of course, it is possible that employees are unwilling to cooperate, not
because of indifference or laziness, but because they perceive that management would not support their desire to implement the updated innovations. Indeed, the literature abounds on the effects of employee perceptions
on organizational climate, demonstrating how positive perceptions of
management behavior and cultural norms in the workplace (i.e., climate)
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Performance at work and its appraisal­7
enhance, inter alia, motivation, loyalty, teamwork, and efficiency. The
opposite is also true: negative perceptions of the climate at work contribute
to undesirable worker behaviors and a lowering of performance.
It is important to stress that we refer to the subjective perceptions of
employees – say, of their organization’s degree of favorability to implement
change – and not to an objective description of the organizational climate.
The emphasis is on perceived rather than objective realities, because
(1) individuals tend to react to perceived characteristics rather than to
objective contextual features (Yasai-Adekani, 1986); and (2) because the
literature defines organizational climate conceptually as the entirety of
various organizational aspects as they are perceived and represented in the
employee’s mind (Schneider et al., 2000; Zohar and Luria, 2004).
1.3.4
Management and Management Style
A further concomitant is management style or leadership. Lord and Smith
(1999) argued that effective leadership is a factor that can promote high
levels of employee performance. Effective leadership can be defined, for
instance, in terms of style. Thus, for example, in a qualitative study of
employee performance, Iqbal, Anwar, and Haider (2015) concluded that
autocratic leadership is useful in the short term, while both democratic
leadership and participatory leadership styles are most useful in the
long term. Another instance of successful management style is the
Pygmalion effect (Eden, 1990), which illustrates that when management
conveys positive expectations to its employees – such as awakening them
to their potential to achieve higher performance levels – the employees
consequently achieve according to these expectations. It appears that
when a relationship of trust exists, the subordinate receives preferential
treatment and reciprocates by excelling and fulfilling expectations. The
opposite occurs when the manager–subordinate relationship is flawed.
In a similar fashion, Bauer and Green (1996) explained the outcome of
this management style with reference to leader–member exchange (LMX)
theory: where there is a relationship of trust between managers and subordinates, managers delegate authority, allocate appropriate assignments,
and provide maneuvering space and autonomic activity. Employees justify
that trust by performing optimally and by demonstrating initiative and
creativity, thus gaining their managers’ appreciation.
1.3.5
Congruence Between the Employee’s Resolve and Offered Rewards
Implied in our discussion on trust is the overall notion of employee
satisfaction in the workplace. We understand that the positive ­perception
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Improving performance appraisal at work
of management style enhances employee performance, not only because
of the mechanisms outlined above but also because the invested trust
increases employees’ satisfaction at work. In a sense, the trust and attention given to workers is a form of reward or compensation, over and
above salary earned. In a wider investigation on work adjustment, Tziner
(2002) found that there is, indeed, a strong connection between employees’
needs and the rewards offered by the organization in terms of employee
performance. When the job or organization satisfies workers’ needs, such
as autonomy and promotion, the chances are higher that performance
will increase. In that respect, it is useful to talk of job congruence, defined
as the degree of fit between workers’ performance qualities (such as their
knowledge, skills, abilities and motivation) and the performance qualities
required by (1) the job; and (2) the expectations derived from the organization’s climate and culture.
1.3.6
The Work Team
A work team can also affect individual performance in several ways. Team
members can help their colleagues to develop skills, amass knowledge,
overcome obstacles, and utilize their abilities to the fullest. Moreover, the
set of team members’ performance data induces a unique dynamics of
interpersonal relationships, which in turn affects performance. The more
cohesive the team, the greater the pressure to conform to group behavior
standards, while increasing or decreasing the work effort or output
(Hackman, 1976; Tziner, 2002). So strong can be the effect of a cohesive
team that the strong interpersonal relationships contribute not only to
individual team members utilizing their abilities optimally, but also to transcending their work potential. The opposite is true for discordant teams.
As indicated, when appraising employees’ performance, we should
better deduct the effect of all these factors that extend beyond the employees’ input, otherwise, we could reach erroneous and biased conclusions. We
would not be surprised if much higher or lower performance values than
actually observed were then recorded.
Consider, for instance, that a development team at a hi-tech company is
working on planning a block1 for an electronic component. There is a new
team member without practical experience since he has just completed his
engineering studies. If the team welcomes him with open arms, helps him
to close the experience gap and mentors him formally and informally, his
performance will improve dramatically. On the other hand, if the team
does not provide him with opportunities for learning and perpetuates his
lack of experience by allocating him only bureaucratic tasks (rather than
purely professional ones), his performance will certainly be low.
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Performance at work and its appraisal­9
Employee’s input (e.g., skills,
abilities, motivation and
personality)
Technology
JOB
PERFORMANCE
Situational effects
Team composition
and team dynamics
Organizational
climate and culture
Figure 1.1
Congruence
between the
employee’s needs
and
organizational
rewards
Manager’s
management style
Factors that affect work performance
Now let us focus on one of the veteran team members, an engineer: she
is less talented in a specific aspect of expertise than the other teammates.
The team is cohesive and the relationships between the members are
friendly and supportive; thus, on occasion, as a friendly gesture, the other
engineers willingly perform parts of her work. They pay her back for times
when this worker helped them with tasks in which she utilized her specific
professional strengths. Consequently, all the team members fulfill their
assignments. When we appraise the performance of that veteran engineer,
we would want to deduct the team’s effect, and appraise the performance
as it derives from the worker’s specific output, rather than from that of
the team members. We also recommend, however, appraising the team
performance as a whole.
Figure 1.1 describes the factors that affect work performance. As
appraisers, we would evaluate the effect of the worker’s input on performance (direct and indirect; shaded) and deduct from the assessment the
effect of all the other factors (unshaded).
1.4
1.4.1
PERFORMANCE APPRAISAL
What Do We Mean By Performance Appraisal?
Now that we know what is meant by performance in an organization
and some of the extraneous factors that impinge upon an employee’s job
performance or input, we understand that, in some way, performance has
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Improving performance appraisal at work
to be measured and evaluated. In which case, we want to understand what
we mean by performance appraisal. First, however, we need to understand
what appraisal means.
1.4.1.1 Distinction between appraisal and measurement
The distinction to be considered is between appraisal and measurement.
Measurement is the objective assignment of numbers to objects or events.
In other words, measurement produces the same numbers no matter who
performs the measurement. Notably, however, Bernardin and Villanova
(2005) maintained that, regarding performance, objective measurements
are unavailable in most jobs. Even if they do exist, in terms of quantity
and quality of output/performance, the measurements are ‘contaminated’
by irrelevant factors. For example, the volume of sales of insurance
policies against natural disasters (such as earthquakes) is affected not
only by the insurance agent’s professional expertise or motivation, but
also by external factors such as media reports about imminent natural
disasters.
In consideration of the above distinction, this book deals with performance appraisal rather than performance measurement.
1.4.1.2 Definitions of performance appraisal
We can thus define performance appraisal as a formal, well-planned
organizational process designed to obtain reliable and precise information
about the job performance of a certain employee and his or her job-related
behavior. Performance appraisal allows us to distinguish between excellent,
mediocre, or poor performers, based on parameters considered essential to
determining satisfaction with employees’ performance.
Accordingly, one way to view performance appraisal is to consider it as
a process of assessing employees’ performance by comparing their present
performance with the established standards of the organization (as communicated to the employees), and subsequently providing the employees
with feedback for the purpose of improving their performance, as needed
by the organization.
From the perspective of human resource management, performance
appraisal’s goal is mainly to develop techniques that help employees meet
their personal goals for growth, development, and personal success, while
at the same time promoting the effectiveness of the organization’s functioning (see DeNisi and Smith, 2014). Tziner (2002) has indicated that the
aim of performance appraisal is to assist organizations to actualize their
inherent performance potential by facilitating enhancement of employees’
motivation and work-related skills. Performance appraisal also serves to
hone management’s decisions as to how to make those improvements and
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Performance at work and its appraisal­11
how to assign employees to new positions, where appropriate. Of course,
there is a need to establish the relationship of the individual’s improved
performance to the overall development and measures of success of the
total organization – namely, ‘firm-level performance’.
1.4.1.3 Distinction between evaluators’ appraisals and actual ratings
The individual’s performance is usually evaluated over a period of time
(most often on an annual basis) and, generally, a score of some sort is
assigned to the evaluated employee. As straightforward as the definition
of performance appraisal may appear, ultimately, we are dealing with
subjective performance measures. In other words, the assignment of values
to employees is the result of a human judgment procedure that naturally
includes subjective interpretation. Consequently, in addition to the effects
of the extraneous and situational influences on performance discussed
above, there may well also be another distinction to be addressed – namely,
the gap between workers’ actual performance and the consequent appraisal
of that performance by their managers and colleagues. Or to express this
notion in a slightly different way, a distinction should be made between
performance appraisals that evaluators formulate about certain employees
(and are often willing to say so informally), and the ratings that they actually record concerning the same employees.
For example, John’s manager evaluates his performance as mediocre,
but he knows that writing a mediocre appraisal in John’s evaluation sheet
would prevent John from receiving the bonus awarded to outstanding
workers. Therefore, during the feedback meeting, the manager might tell
John that his performance is average, but in the formal appraisal (the
evaluation sheet) he writes a much higher rating. This creates a discrepancy between the performance appraisal that the manager formulated
and the actual value written in the report. These ‘gaps’ or distortions
are symptomatic of the kind of ‘contaminations’ or impediments that
affect appraisal results and thwart the achievement of valid performance
values.
Having pointed out these distinctions by way of introduction to our
major theme, we now turn to an initial description of the performance
appraisal process per se.
1.5
THE PERFORMANCE APPRAISAL PROCESS
We have begun to indicate that performance appraisal is a serious, if not
a drawn-out process; it is not a one-off episode. The appraisal procedure
is more complex than meets the eye. To understand this, we can follow its
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Improving performance appraisal at work
1. Employee’s actual
performance
Judgment
2. Performance
appraisal formulated
by the rater
Rating
3. Performance rating
recorded in formal
evaluation sheet
Feedback
Figure 1.2
Performance appraisal process
basic stages and components by examining Figure 1.2 and the annotations
below, as follows:
1.
2.
3.
Judgment (left arrow). At this stage, information is received about the
employee’s performance at work (square 1) and that data is formulated as an appraisal by the appraiser (square 2) with all the possible
limitations discussed above, such as subjective interpretation by the
appraiser and external influences on employees’ performance.
Rating (right arrow). At this stage, the performance appraisal (square 2)
is formally recorded (square 3), again with the possibility of discrepancies between the appraiser’s evaluation and the formal rating recorded,
on account of ‘political’ grounds (as above, among other factors).
Feedback (bottom arrow). Since appraisal is a process, it does not stop
with the measurement. A constructive feedback about employees’ performance (as reflected in the appraisal form and most often provided
to the employee by means of a personal interview) demonstrates the
extent to which employees’ efforts at work were productive and what
aspects should be improved. Consequently, furnished with the supervisors’ comments, employees can then elevate their actual performance.
Murphy and Cleveland (1995) created a four-component performance
appraisal model that built on the judgment and rating components.
The researchers employed a social-psychological paradigm and regarded
performance appraisal as a communications process that occurs within a
well-defined organizational context. The final component addresses how
the organization should evaluate the information gleaned from the raters
(Figure 1.3).
More specifically, the four elements can be elaborated upon as follows:
1.
Organizational context. Organizational context includes (a) intraorganizational factors such as organizational values, climate or culture,
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Performance at work and its appraisal­13
CONTEXT
Rating
Judgment
Evaluation
Source: Adapted from Murphy and Cleveland (1995, p. 19).
Figure 1.3
2.
3.
4.
Performance appraisal: The four-component model
competition between departments or individuals; and (b) organization
environment issues such as the degree of competition in the industry
and economic/political issues regarding the organization’s product (see
also social context of PA in Levy and Williams, 2004).
Judgment process. The judgment process usually concerns two topics:
(a) how performance information is obtained; and (b) how this
information is processed to form judgment. Judgment is determined
by observing the employees’ behavior, investigating prior impressions
about the employees and behavior reports, and the degree of personal
affiliation of the appraiser to the ratee. Processing primarily relates
to encoding and retrieval, topics to which we return in the ensuing
discussion.
Rating. Rating is the score recorded on the evaluation sheet. The
rating represents the message that the rater wants to communicate to
the recipient of the appraisal, and depends on the rater’s goals and the
organizational context. As mentioned, the score does not necessarily
reflect the rater’s judgment.
Evaluation. Evaluation of performance appraisal refers to how management employs these appraisals in the organization. For instance, do
the higher echelons use the appraisals when considering promotions to
administrative positions? If not, then the use of appraisals that relate
specifically to ‘administrative decision-making’ or ‘accuracy of judgment’ may not be of much value, because in those circumstances these
items make no difference in management’s decision making.
The importance of this model lies in an evaluation that is based not only
on a bottom-line, ‘final composite score’ or a ‘cold’, formal, comparison of
workers’ grades, but is also based on the contextual and personal aspects
of attainment and performance on the job. Once the wider contextual
issues impinge on the evaluation, new challenges arise, however: the
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Improving performance appraisal at work
supervisor (or rater) has to observe the performance of another employee
(perhaps over the course of a year) and possibly collect reports of others’
observations of the same employee. The supervisor has to sift through this
information and to make a judgment about the employee’s performance –
ideally in an objective fashion, without bias, and without the observer
unduly ‘interfering’ in the work of the evaluated employee. Other factors
that need to be taken into consideration are the commitment of both raters
and evaluated employees to the task, and the degree and quality of support
the employees receive from their supervisors. These challenges, among
other issues in the performance appraisal, are themes to which we shall
return in the following chapters.
1.6 DISTINCTION BETWEEN JOB EVALUATION
AND PERFORMANCE APPRAISAL
Performance appraisal would appear to be conceptually similar to job
evaluation; however, the two terms are, in fact, radically different. Job
evaluation relates to the job from the point of view of the requirements
of the organization. Its function is to set the relative value of a job or
position in the organization in order to establish remuneration scales.
Part of the job evaluation involves job analysis, the process by which the
various aspects of the job are derived, mainly (1) prerequisites (e.g., the
necessary education, skills and abilities needed to execute the task(s);
(2) performance requirements (e.g., level of responsibility, talent); and
(3) output requirements (e.g., product manufacture and method design).
Later (in Chapter 3), we shall see that performance appraisal criteria are
the important role components that are identified through the job analysis
and processed accordingly into the dimensions that describe behavior
and its results relevant to the job. The criteria are used as dimensions that
measure the degree of the worker’s success in his or her job.
In contradistinction to job evaluation, the object of performance
appraisal is the employee – the individual, rather than the job. The aim of
performance appraisal is to expose and develop the entirety of information that contributes to unbiased rating of employees in an organization
according to the quality of their performance.
Nonetheless, there is a functional connection between performance
appraisal and job evaluation. Since appropriate job evaluation includes
a detailed description of the tasks to be performed as part of the job, it
is easier to appraise an employee’s performance when the tasks included
in the job are defined clearly and unequivocally. Job evaluation is a long,
challenging process, and therefore many organizations choose not to
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Performance at work and its appraisal­15
perform that task. However, in organizations that perform job evaluation,
performance appraisal relies on that precise description. To be clear, this
volume deals with performance appraisal and not with job evaluation.
1.7 DISTINCTION BETWEEN PERFORMANCE
APPRAISAL AND PERFORMANCE
MANAGEMENT
As we begin to understand what performance appraisal is, we will also
begin to understand that in the contemporary world of business today
performance appraisal can be seen as part of a larger context of organizational functioning, commonly labeled performance management, a subject
to which we return in later chapters. At this point in our discussion, it is
also pertinent to make the distinction between the two terms, performance
appraisal and performance management. While performance appraisal is a
relatively narrow process to assess how individual employees are performing and how they can improve their job performance and contribute to
the overall organizational performance, performance management is the
creation of an entire system (a setting, a work environment, a culture),
bringing together all the essential factors so that all of the people involved
in the organization are able to work in an aligned and coordinated manner
to the best of their abilities (after Grubb, 2007, p. 2).
Having touched upon definitions, goals, and a preliminary model of the
performance appraisal process, as well as some of the human aspects of the
process, we are now ready to examine the uses and value of performance
appraisal to both employers and employees, as well as necessary considerations and preconditions that management should take into account before
embarking on the performance appraisal track.
NOTE
1. A block is an electronic chip that is being developed. A large block is often divided into
a number of smaller blocks, and each team member works on one part. The parts are
interdependent.
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